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How the New FTC Regulations Affect Social Media Marketing

The new March 2013 FTC regulations were introduced as a way to help consumers feel they can trust online advertising as a source of information. While there were already some regulations put into place by the Dot Com Disclosers Report of 2000, this current report digs deeper into the mobile, online and social media space.

"Clear and Conspicuous Disclosures in Online Ads"

For an online advertisement to be "clear and conspicuous" in its disclosures, there are a number of guidelines that must be followed.

Disclosures must be very close to the claim it's disclosing.

When possible, avoid having to scroll to see the disclosure.

If using hyperlinks for disclosures they must be obvious, labeled appropriately, go directly to the disclosure upon click-through, repeated in long advertisements and be monitored for effectiveness.

Disclosure is needed before the decision to buy is made (before someone "adds to cart").

Above all else, the claim needing the disclosure must actually be disclosed.

How the New FTC Regulations Affect Social Media

Until now, there was little regulation on disclosure in social media. Due to the limited space often allotted in posts, many marketers didn't bother with disclaimers in ads on social media networks. That, however, is no longer a valid excuse according to the FTC.

In-Text Disclosure

The FTC gave an example of a tweet by "JuliStarz" promoting a diet pill she claims made her loose 30 pounds in 6 weeks. Because those aren't typical results and because "JuliStarz" was paid to Tweet that, she is in violation of the new FTC regulations.

For a post to follow the FTC regulation, it must first state that it is an advertisements and be followed up with the disclosure to the claim. Example:

Hyperlink Disclosure

If you choose to link to the disclosure, it must be obviously included next to the claim. For example, JuliStarz cannot say that she lost 30 pounds in 6 weeks then follow it up with a link to the disclaimer but not state what the link leads to.

To properly link to a disclosure, make sure the user knows that what they're clicking on is the disclosure link.

Blogging Disclosure

The new FTC regulations also affect how bloggers must disclose posts about products they received for free. Before the current regulations, providing a disclosure or hyperlink to a disclosure at the end of the blog was sufficient. Now the FTC warns that consumers could become distracted in the post before reaching the bottom to find out what they read was provided by the company.

For the disclosure to be "clear and conspicuous", the blogger must tell readers at the top of the page that the product was free from the company.

While adding "Ad:" to the beginning of a post might not be the sexiest way to advertise your product over social media, it helps ensure consumer trust and keeps the FTC happy. And everyone knows, if the FTC isn't happy, no one's happy.

Join The Conversation

From my understanding of the regulations process, it's mainly based on companies being reported for violations. Because of this, I'm sure you're correct in thinking many violations will be overlooked. If a company does not comply they could face anything from a "cease and desist" notice to a potentially hefty fine; it seems to change case-by-case.

Very interesting article Melissa, thank you for posting. My question to you is two-fold. First, how do you anticipate the FTC to monitor the entire social universe or even a good percenatge of it to ensure compliance? Clearly there will be violations that slip through but I think this is going to be a huge undertaking. Secondly, what types of consequences will there be for violators? I am assuming there will be some sort of warning system, but what happens after that?

I don't like very much the way Pinleague advertise itself: it's a bit unclear. For example, it suggests to sign-up for a free account and it asks my credit card number to pay a dollar for a one-time fee it didn't mention before. Even a post on new FTC regulations look suspicious ;)